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Global markets — which went through a turbulence-free phase over the past few weeks on hopes that the US and China had largely sealed a trade accord — were jolted by US President Donald Trump’s tweets on Sunday, where he said the US would raise tariffs on $200 billion of Chinese goods from 10 per cent to 25 per cent this week. The hardline taken by Trump spooked global markets as investors turned risk averse.

Declining for a fourth straight day, the benchmark Sensex fell 363 points, or 0.93 per cent, on Monday to end at 38,600, while the Nifty 50 index lost 114 points, or 0.97 per cent, to end at 11,598. Both the indices fell the most since April 22, when they had declined 1.3 per cent each following a surge in global oil prices after the US announced it put a complete end to oil imports from Iran.

The fall in the domestic market, however, was subdued compared to the carnage seen in global equities. The China market fell 6 per cent, their worst fall in over three years, and most European markets were down 2 per cent.

The losses in the domestic market were mitigated thanks to the fall in oil prices. Brent crude traded at $70.9 a barrel compared to last week’s close of $71.2. Brent is down more than 4 per cent from its six-month high of $74 a barrel hit during the April end. “Renewed tensions between US and China dampened risk sentiment. However, lower crude oil prices have helped halt the slide,” said Abhishek Goenka, managing director of IFA Global.

The India VIX index, a gauge for market sentiment, shot up 10 per cent to 26.43, indicating nervousness among investors. The fall in the broader market was relatively small with the NSE Midcap 100 and Smallcap 100 indices losing 0.74 per cent and 0.94 per cent, respectively.

The decline in oil prices helped the rupee and the bonds. The rupee ended at 69.41, down 0.27 per cent over its previous close of 69.22 against the dollar.

The yield on the 10-year government bond ended unchanged at 7.39 per cent, after dropping to a low of 7.36 per cent.

Baring five, all Sensex components ended with losses led by YES Bank and Tata Motors, which fell 5.3 per cent and 4.5 per cent, respectively. The biggest drags on the Sensex performance were HDFC Bank, HDFC and Reliance, who together pulled down the index by 228 points.

“We expect market turbulence to continue on the back of US-China trade tensions, the ongoing general elections and March quarter earnings season,” said Hemang Jani, head, advisory, Sharekhan by BNP Paribas.